By Joel Chouinard, CFP®
April 23, 2026
If you’re eyeing the leap from associate to income partner at Kirkland & Ellis, you know the transition is more than a line on your resume, it’s a major milestone in Big Law! But with the new title comes a set of dramatic changes to your entire financial picture that can catch even the most prepared attorneys by surprise.
Making income partner means your compensation jumps, but so do your responsibilities and complexities around cash flow, taxes, retirement, and benefits. Your take-home pay, tax obligations, and planning strategies all need a comprehensive review. Understanding these changes ahead of time may help you better capture the opportunities and reduce the stress that comes with the change.
Let’s break down what you need to know for 2026: compensation, benefits, retirement plan contributions, and taxes.
How Does Compensation Change When You Make Income Partner at Kirkland & Ellis?
Kirkland & Ellis is the world’s largest law firm with over $8 billion in revenue. It’s no surprise that it follows the Cravath Scale pay structure. But unlike many of their Am Law 100 peers that require eight or nine years to reach partnership, Kirkland makes associates eligible after year six, accelerating your track and your earnings.
As a first-year income partner in 2026, you earn what a seventh-year associate makes on the Cravath Scale:
- Base Salary: $420,000 per year (you receive $17,500 twice per month)
- Year-End Bonus: $115,000
- Special Stipend: $18,750
Why Does Kirkland Offer a Special Stipend to New Partners?
Transitioning to partner also brings new financial burdens, particularly around taxes and benefits. To help offset these added expenses, Kirkland provides a special stipend ($18,750 in 2026) divided equally across your 24 draws. This is designed to ease your move into self-employment, covering additional costs you didn’t have as an associate.
What’s the Real Bottom Line?
On paper, your total comp approximates $550,000. But headline numbers don’t tell the whole story. Required retirement contributions, benefit changes, and higher tax liabilities all cut into take-home pay. This makes financial planning important for avoiding surprises and making sure your pay supports your goals.
What Happens to Your Benefits Package as an Income Partner?
Benefits shift dramatically when you make partner, especially if you have dependents. At many Am Law 100 firms, new partners must cover the full cost of benefits, significantly increasing out-of-pocket expenses. Kirkland, however, continues to subsidize core benefits (medical, dental, vision). As a result, your costs for these major benefits remain similar to what you paid as an associate, helping maintain some predictability.
Which Benefits Change?
Changes you must account for as a Kirkland income partner:
- You must enroll in the High-Deductible plan: Copay plans are no longer available, which means you may have lower premiums, but higher out-of-pocket medical costs.
- Loss of FSA Options: You lose access to the Dependent Care FSA (for managing daycare expenses) and the medical FSA. Note, you’re still eligible to take the Child and Dependent Care Credit on your tax return.
- Mandatory Insurance Requirements: New partners must buy a $2 million life insurance policy and a $5 million umbrella liability policy through the firm’s group plan.
- Disability Premiums: Partners are now responsible for paying long-term disability premiums.
What’s the Broader Impact?
These changes are easy to overlook but can add up quickly, reducing the perceived income bump from partnership. Losing the FSA means losing upfront tax savings, while the addition of required insurance and disability costs pushes your budget higher. All in, new income partners can expect to pay around $3,000 more per year for their benefits.
How Do Retirement Plan Contributions Change When You Become an Income Partner?
Becoming a partner brings a new layer of retirement complexity. As an associate, your retirement plan was simple—contribute to your 401(k), up to the annual limit if you’re able. Now, as an income partner, you’re required to contribute a portion of your bonus to the other side of your 401(k) plan. Let’s dive into what that means.
How 401(k)s Work
401(k) plans, also known as Defined Contribution plans, have two components: voluntary employee contributions and employer profit-sharing contributions. The IRS caps the total of employee and employer contributions at $72,000 in 2026 for those under 50 (also known as the 415(c) limit). Here’s the breakdown for 2026:
- Voluntary Employee Contribution: Up to $24,500 (deducted from your bi-monthly draws).
- Employer Profit-Sharing Contribution: $47,500, (paid from your year-end bonus).
Most Am Law 100 firms require new partners to contribute the full employer side immediately ($47,500), but Kirkland eases you in with a “step-in” system:
- Year 1: 25% of the employer limit ($11,875)
- Years 2–3: 50% of the employer limit ($23,750)
- Years 4 and beyond: Full $47,500 employer-side contribution.
This approach helps ease cash flow pressures and allows new partners to adapt to their new reality.
Why Does This Matter?
As an associate, apart from taxes, nothing was deducted from your bonus. You had full autonomy on how to deploy it. As a partner, a good chunk of your bonus will be automatically deducted and contributed to your 401(k). If you’re not prepared, you could be left with a lot less than you thought. Now, on the flip side, a simple $11,000 contribution this year could be worth over $100,000 in your retirement because of compound growth. You’ll just have to wait to get your hands on it.
What Tax Changes Should You Expect as a Kirkland & Ellis Income Partner?
Your tax situation changes completely the minute you make partner. Even though you are not (yet) sharing in firm profits, the IRS treats you as a self-employed owner of the firm. This means new liabilities, new quarterly deadlines, and new exposures.
Why Aren’t Taxes Withheld from Your Draw?
As a partner, Kirkland no longer withholds Federal taxes from your bimonthly draws. This means the money landing in your bank account is the gross—not net—amount, and a significant chunk will ultimately belong to the IRS.
At the end of each quarter (listed below), you need to make a tax payment to the IRS for your estimated liability. Missing these payments or underestimating your liability can result in IRS penalties, so it's crucial to work with an accountant who can help you determine how much you need to pay.
- Q1 (Jan–Mar): Payment due April 15th
- Q2 (Apr–May): Payment due June 15th
- Q3 (Jun–Aug): Payment due September 15th
- Q4 (Sep–Dec): Payment due January 15th (of the following year)
To prevent shortfalls and smooth out cash flow, I typically recommend setting aside a dedicated amount from each draw into a tax savings account (such as a high-yield savings account). This mimics tax withholdings when you were an associate. When the payment is due, you just pay from that account.
How Are You Impacted by Self-Employment Taxes?
Partners are now also subject to the Self-Employment tax, which is the equivalent of the Social Security and Medicare taxes for self-employed individuals. Here's the breakdown:
- Social Security: 12.4% only assessed on the first $184,500 earned.
- Medicare: 3.1% on your entire income.
- Additional Medicare: 0.9% of income above $200,000 for single filers and $250,000 for joint filers.
As an associate, you were responsible for half of the Social Security and Medicare tax and the firm picked up the other half. This means your tax liability can significantly increase when you transition to partner. That said, the IRS allows you to deduct half of the Self-Employment tax on your personal tax return, helping you recover some of the tax through a deduction.
What About State Taxes?
As an associate, you pay state income taxes if you live in a state that levies an income tax. Pretty straightforward. As a partner, you’re also responsible for your share of state taxes in every jurisdiction where Kirkland earns profits—even if you personally work from a no-income-tax state (like Texas or Florida). These taxes are withheld from your draw but still require careful planning and reporting.
Thankfully, Kirkland files a composite (or group) tax return in most states, so you don’t have to file in every state where the firm operates. But this does add complexity (and cost) to your tax return.
How do you get your taxes right?
I cannot emphasize this enough, as a partner in Big Law, it’s very important that you work with a qualified tax professional that can guide you through the intricacies of being a business owner. To help their attorneys, Kirkland partnered with CPA firm Topel Forman to streamline the tax-filing process. You should get in touch with your Topel representative as soon as you make partner.
What's Next: Navigating the Big Law Partnership Landscape
We’ve covered the essentials for preparing to transition to a Kirkland & Ellis income partner: compensation details, benefit changes, new retirement planning demands, and the intricacies of your tax position. But your financial picture isn’t limited to these factors. Savings strategy, investments, risk management, and broader career planning all interact with the partnership changes described here.
Getting these decisions right usually benefits from professional coordination, not only to help with compliance, but also to ensure you’re leveraging every opportunity and avoiding the pitfalls unique to Big Law transitions.
If you’re approaching partnership, in your first year, or reviewing your plan, strategic guidance from an advisor familiar with Big Law attorneys can help you steer through the complexity, avoid surprises, and focus on growing your career—not just managing your finances.
Ready to take the next step?
📅 Schedule your free introductory call
💼 Learn more about our services & pricing
SharpEdge Financial LLC is a registered investment adviser registered with the State of Texas. Registration does not imply a certain level of skill or training. The views and opinions expressed are as of the date of publication and are subject to change. The content of this publication is for informational or educational purposes only. This content is not intended as individualized investment advice, or as tax, accounting, or legal advice. Although we gather information from sources that we deem to be reliable, we cannot guarantee the accuracy, timeliness, or completeness of any information prepared by any unaffiliated third-party. When specific investments or types of investments are mentioned, such mention is not intended to be a recommendation or endorsement to buy or sell the specific investment. The author of this publication may hold positions in investments or types of investments mentioned. This information should not be relied upon as the sole factor in an investment-making decision. Readers are encouraged to consult with professional financial, accounting, tax, or legal advisers to address their specific needs and circumstances.